National Housing Bank Annual Lecture

Thank you, Mr. Kalyanaraman, for giving me this opportunity to deliver the
National Housing Bank's Annual Day Lecture to celebrate the 29th Foundation Day.
The record of NHB in the past few years has been extremely significant and
impressive in launching new programmes, and substantially expanding its
financial assistance for rural as well as urban housing. As is well-known, NHB
is a wholly owned subsidiary of Reserve Bank of India, and was set up in July
1988 under the National Housing Bank Act, 1987. Since then, both the government
and the RBI policies have been highly supportive of housing finance through NHB,
and providing concessions for housing particularly to low income groups ? and
also increasing the availability of land at below market rates for sections of
urban population. All these measures have definitely given a major fillip to
institutional housing finance, and contributed to expanding the scope of NHB's
role in this important sector.

It will be recalled that the high level group which recommended the setting
up of NHB in 1987 envisaged broadly five main functions for NHB namely:

First, to promote new housing finance institutions (HFIs) - some with
countrywide remit and some with local jurisdiction;

Second, to regulate the working of the housing finance institutions and
coordinate their activities, as also those of other agencies in the housing
field;

Third, to extend financial support to the housing finance institutions
at the national/regional/local level including apex cooperative housing
finance societies;

Fourth, to formulate policies relating to mobilization of resources and
extension of credit for housing including creation of new instruments of
savings linked to housing; and

Fifth, to play a facilitative role in identifying and removing various
impediments - legal, fiscal, physical, technical, environmental, to the
active involvement of the household sector in deploying their savings in
housing.

In all the above five functions recommended by the High Level Group, NHB has
contributed significantly to expansion and depth of housing finance in our
country. NHB has been particularly responsive to quickly approving the
establishment of new housing finance companies. In the past six months in 2017
itself, NHB approved three new housing finance companies. This is in addition to
eleven approvals that were given in the previous 12 months. The infrastructure
status awarded to affordable housing in this year's Union Budget is likely to
further support the supply side of low income housing and lead to a boom in
affordable housing in the next few years. Thus, as compared with allocation of
6000 crores for rural housing between 2008-09 to 2013-14, during 2013-14 and
2016-17, funds allocated by NHB were more than four times i.e. nearly 33000
crores. In respect of urban housing also there was a four-fold increase in
allocation of funds by NHB during 2013-14 to 2016-17. The rural housing fund and
urban housing fund paved the way for financing over 20 lakh households in the
target segments.

In this connection, it is also important to mention that in addition to
housing finance through NHB, the government has also launched a new Pradhan
Mantri Awas Yojana (PMAY) at the end of 2016. This initiative has considerably
extended the benefit of Credit Linked Subsidy Scheme (CLSS) which is the key
component of PMAY. NHB as the Central Nodal Agency (CAN) has partnered with 174
Primary Lending Institutions to implement PMAY (Urban)-CLSS, under Housing for
All by 2022 Mission of the Government of India. In Delhi, for example, the Delhi
Development Authority which is the nodal agency for PMAY, has also decided to
help people avail the benefit of the Credit Linked Subsidy Scheme (CLSS). Under
the scheme, eligible allottees can avail of subsidy on interest. The benefit
will range between Rs. 2.4 lakh and Rs. 2.7 lakh. But only those allottees can
benefit from CLSS who meet the income status and other criteria of the scheme.
Under this new scheme, by 2022, when India celebrates its 75 years of
independence, a vast section of the poor would have been provided affordable
housing with water facility, toilet facility and 24-hour electricity supply.

So, by and large, there is simply no doubt that under the guidance and help
of NHB, supported by government and RBI, the expansion of housing finance in
India in the past few years has been highly impressive. Let me take this
opportunity to congratulate Mr. Kalyanaraman, Mr. Ashwani Tripathi and Mr. Rajan
for achieving the tasks assigned to NHB under the 1987 Act in a most positive
way.

While NHB's record is most impressive, I should also mention that on the
whole our country's record in social sectors is not as good as it should be. As
you are well aware, the most important measure of soci-economic programme among
developing countries is a country's rank in the Human Development Index (HDI)
which is computed annually by the United Nations Development Programme (UNDP).
The HDI is composite of three basic components of human development viz. Life
Expectancy, Literacy and Standard of Living. It is believed to be a more
comprehensive measure of progress of a country than per capita income or growth
rate of GDP. In the Human Development Report 2016, India's HDI was 0.609, with a
rank of 131 out of 188 countries. Though India is currently among the fastest
growing economies in the world, its rank in terms of human development is still
relatively low ? lower than that of other BRIC countries. In its development
agenda, over time, India is also committed to achieving the Sustainable
Development G oals (SDGs), set by the UN, which attempt to address a
comprehensive set of socio-economic goals, including the objective of making
human settlements inclusive, safe, resilient and sustainable.

An important challenge for our country, in addition to further accelerating
the availability of affordable housing finance, is to launch a comprehensive
programme for achieving all the socio-economic goals set by the United Nations.
Today, our country has the advantage of having a government in power constituted
by a party which enjoys a majority of its own for the first time after 1989.
Since 1989, until recently, we had as many as 9 governments with an average life
of about 2 ½ years. Five of these had a tenure of 1 year or less with enormous
powers to allocate resources, control public enterprises and decide interstate
allocation of investments. Today, we have a government which is likely to be
stable over its full term of five years. What is even more important is that it
is fully accountable without any excuses or attribution of its failures to the
so-called 'compulsions of coalition politics'. By any standards, India's
domestic potential today is huge. India is a well-established democracy which
grants
full freedom to all its people to do what they wish and provides them with
adequate powers to hold the government responsible. Today, we have also have
full access to world-class technology and skills at comparatively low cost. As
it happens, unlike the earlier period, at present our foreign exchange reserves
are also sufficient to tackle any balance of payments pressures that might arise
without having to seek assistance from abroad.

As it happens, currently India also has the advantage of being regarded as
one of the fastest growing emerging countries, which has the resources to
implement whatever measures it wishes to take for expanding the welfare of the
people, particularly low income groups. As mentioned earlier, a number of reform
measures have already been undertaken by the government to promote housing as
well as other benefits to the poor. Some important measures recently taken by
the government include inter-state Goods and Services Tax (GST), completion of
existing public projects, such as in power sector and roads, and schemes like
Jan Dhan Yojana. All these proposed economic reforms will certainly contribute
to higher growth and hopefully reduce poverty. Ultimately, of course, the main
task is to implement what has been promised.

As we look ahead, although much more needs to be done, I have no doubt that
NHB's growth prospects under the present leadership as well as support from
government and RBI would, over time, certainly expand the availability of
shelter and housing in all districts of India in the near future.